Being the owner of a small hotel and villa in Bali, I have first hand experience of the issues, problems and solutions to land ownership, leasing, company formation, legal agreements, permits, management, staffing, local customs and all the other issues that arise when one builds, owns and operates property in Bali. I appreciate that for potential foreign owner/investors, financial and legal security and clarity is a prime consideration in making any purchase of property in a foreign country. I believe that I have the experience and integrity to offer you this security and clarity and further, I believe the company that I have formed gives the secure and legally sound structure to make this important investment.

In addition, the management of the villas is designed to minimize costs to owners while assuring them of maximum service, independence and flexibility of use. This is done in the following ways:

In Indonesia no non-Indonesian can own land legally. There are various ways (legal and pseudo legal) that foreigners have used to get around this restriction. I know a number of these ways and have used them myself. The most legally safe way to “own” land as a non-Indonesian citizen is to set up a PMA company. This is an official and authorized foreign investment company set up by a non-Indonesian, approved by the Indonesian Investment Coordinating Board and registered by the Indonesian Ministry of Justice. It is owned, managed and controlled by the foreign shareholders-in my company’s case that is me. Such a company can then buy or lease land, obtain all the building permits and other licenses to build villas, then construct and sell them to foreign buyers legally and with security of ownership.

Other options such as forming a local limited liability company with a “sleeping” Indonesian owner who assigns all rights to a foreign manager carry more uncertainty and risk and I’m not prepared to take such risks when other people are relying on me to safeguard their investments and assets.

Under the structure of the company I am forming (to be called P.T VINDO) your ownership of the villa you buy and your rights to use common facilities will be clearly defined in a series of documents as will my responsibilities as the manager of the complex. In the Articles of Association of the company will be provisions that will not allow me to borrow money against the value of the villas, assign rights to others, prejudice the financial or legal status of the company or do anything else that would put at risk your rights as a villa owner.

Because the land on which the villas and common facilities will be built will be leased and not owned by the company, the lease agreement will be written between the company and the land owners and then subleases will be written between the company and you the villa owners and users of the common facilities. These leases will be for an initial 25 year period with an extension period of 25 years and agreement to renew for further periods after that. The cost of the villa includes lease of the land both for the villas and land held in common, for 50 years. I will be responsible for the renewal of the lease after 25 years and the payment for such renewal.
In addition to forming the PMA.company and sharing its Articles of Association with you, I will also have prepared lease and sub-lease agreements for you to sign as owners of each villa. I will also prepare a management agreement outlining your rights and responsibilities as villa owners and mine as the manager. I hope to have copies of these available as soon as you agree to purchase a villa and make initial deposits.

In summary, security of ownership of the villa and its common facilities is guaranteed by the PMA company and its structure, regulations and operation as reflected in its Articles of Association. Such security includes the long term (50 year renewable) lease of land, legal ownership of each villa and facilities held in common plus the ability of the owners to use, rent and sell their villa at any time subject to the terms of the Articles of Association, Lease and Management Agreement.

Management
Once the complex is built, the PMA company will manage the villa complex for the benefit of villa owners. Management of the completed Villa Gunung complex will include the following services for which I will be responsible:

• The recruitment, training and payment of staff to operate, maintain and provide security to all villas and facilities in the complex
• Management of income and expenditure, banking, taxation and other payments for operations and maintenance of all property
• The preparation of financial statements for all villa owners on a quarterly basis or as required
• Maintenance of all facilities, equipment, grounds and services within the villa complex
• Preparation of villas and facilities for use by villa owners or guests
• Payment of all routine bills such as utilities, telephone, services, insurance, etc.
• Provision of security at all times for property and grounds
• Liaising with government departments, regional and local government and administration in all matters relating to the operation and licensing of the complex
• Maintaining good relations with the local community and its institutions
• Marketing the villa complex in response to the decisions made by individual villa owners or all owners collectively. (see Marketing section)
• Being responsive to all suggestions and requests from villa owners to improve facilities as long as these don’t impinge of the rights of other villa owners and are within the agreed operating budget